Convergys Reports Fourth Quarter 2013 and Full Year Results

  Convergys Reports Fourth Quarter 2013 and Full Year Results

Business Wire

CINCINNATI -- February 5, 2014

Convergys Corporation (NYSE: CVG), a global leader in customer management,
today announced its financial results for the fourth quarter of 2013 and for
the full year.

Fourth Quarter Summary

  *Revenue of $527 million, up four percent compared with prior year;
  *Adjusted operating income of $43 million, up 15 percent compared with
    prior year;
  *Adjusted EBITDA of $66 million, up six percent compared with prior year;
  *Adjusted EPS from continuing operations of $0.26, reflecting the impact of
    a higher than expected effective tax rate, up four percent compared with
    $0.25 in the prior year; GAAP EPS from continuing operations was $0.23;
  *Repurchased 1.0 million Convergys shares for $19 million, or $19.32 per
    share;
  *Free cash flow of $40 million;
  *In January, received notice of early termination of Hart-Scott-Rodino
    waiting period for Stream acquisition;
  *Convergys plans to provide 2014 guidance for the combined company in due
    course after theacquisition closes.

“We continued to execute well in the fourth quarter with year-over-year
improvement in revenue, adjusted EBITDA and adjusted EPS,” said Andrea Ayers,
president and CEO. “In 2013, we delivered another year of profitable growth
and substantial capital returns, paying $24 million in dividends and
repurchasing $119 million of our stock. Entering 2014, we are making good
progress to complete the Stream acquisition, ensure its successful integration
and maintain strong execution to drive long-term growth.”

GAAP fourth-quarter 2013 results include $3 million for transaction expenses
related to the acquisition of Stream Global Services, Inc., as well as a
non-cash $1 million net settlement charge related to pension and other
postemployment benefit plans. Reconciliation tables of GAAP to non-GAAP
results are attached.

Fourth Quarter Results – Continuing Operations

Revenue – Revenue was $527 million, a four percent increase compared with $509
million in the same period last year.

Operating Income – Adjusted operating income was $43 million, a 15 percent
increase compared with $38 million in the same period last year. GAAP
operating income was $40 million, including the transaction and settlement
charges discussed above, compared with $31 million in the same period last
year.

Adjusted operating margin was 8.2 percent, up 80 basis points compared with
7.4 percent in the same period last year.

Adjusted EBITDA – Adjusted EBITDA was $66 million, a six percent increase
compared with $62 million in the same period last year. Adjusted EBITDA
excludes the transaction and settlement charges discussed above.

Adjusted EBITDA margin was 12.6 percent, up 40 basis points compared with 12.2
percent in the same period last year.

Tax Rate – On an adjusted basis, the effective tax rate of 32 percent was
higher than expected due to changes in the mix of income by jurisdiction and
other tax items.

Net Income – Adjusted net income from continuing operations was $28 million,
or $0.26 per diluted share, reflecting the impact of the higher effective tax
rate, a four percent increase compared with $28 million, or $0.25 per diluted
share, in the same period last year. GAAP net income from continuing
operations was $25 million, or $0.23 per diluted share, including the charges
discussed above, compared with $30 million, or $0.27 per share, in the same
period last year.

Share Repurchase – Convergys repurchased 1.0 million common shares in the
fourth quarter at a cost of $19 million. The remaining repurchase
authorization is $133 million.

Quarterly Dividend – Convergys paid a $6 million quarterly dividend in January
to holders of record at the close of business on December 27, 2013. The Board
of Directors of the company also approved the next dividend payment of $0.06
per share which is scheduled to be made on April 04, 2014, to shareholders of
record at the close of business on March 21, 2014.

Free Cash Flow – Free cash flow was $40 million compared with cash use of $26
million in the same period last year.

Net Cash and Short Term Investments – At December 31, 2013, cash and short
term investments were $664 million, debt maturing in one year was $1 million
and long term debt was $60 million. Net cash and short term investments
totaled $603 million at December 31, 2013, compared with $591 million at
September 30, 2013, and $578 million at the end of the fourth quarter last
year.

Full Year 2013 Results – Continuing Operations

Full year 2013 revenue increased two percent to $2.046 billion, compared with
$2.005 billion in 2012. Full year 2013 adjusted EBITDA improved five percent
to $251 million, compared with $240 million in 2012. Adjusted EBITDA margin
improved 30 basis points to 12.2 percent, compared with 11.9 percent for the
prior year. Full year 2013 adjusted net income from continuing operations grew
nine percent to $117 million, or $1.07 per diluted share, compared with $107
million, or $0.91 per diluted share, in 2012. Full year 2013 GAAP net income
from continuing operations was $105 million, or $0.96 per diluted share,
compared with $28 million, or $0.24 per diluted share, in 2012.

2014 Business Outlook

Convergys expectations for 2014 include:

  *Highly accretive contributions to revenue and earnings from Stream once
    the acquisition closes;
  *Organic revenue and earnings improvement approximately similar to the two
    percent revenue growth and 30-basis point EBITDA margin expansion in 2013.

Convergys plans to provide 2014 guidance for the combined company in due
course after theacquisition closes.

Not included in this outlook are acquisition related impacts such as
transaction costs, integration costs, intangible amortization and tax expense
associated with cash repatriation. Also not included are the impacts of any
future share repurchase activities or non-cash pension settlement charges.

Forward-Looking Statements Disclosure and "Safe Harbor" Note

This news release contains statements, estimates, or projections that
constitute "forward-looking statements" as defined under U.S. federal
securities laws. In some cases, one can identify forward looking statements by
terminology such as "will," "expect," "estimate," "think," "forecast,"
"guidance,” "outlook," "plan," "lead," "project" or other comparable
terminology. Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from our
historical experience and our present expectations or projections. These risks
include, but are not limited to: (i) the loss of a significant client or
significant business from a client; (ii) the future financial performance of
major industries that we serve; (iii) our failure to successfully acquire and
integrate businesses, including risks and uncertainties related to timing of
consummation of the proposed Stream acquisition; (iv) our inability to protect
personally identifiable data against unauthorized access or unintended
release; (v) our inability to maintain and upgrade our technology and network
equipment in a timely manner; (vi) international business and political risks,
including economic weakness and operational disruption as a result of natural
events, political unrest, war, terrorist attacks or other civil disruption;
(vii) the failure to meet expectations regarding the tax treatment of the
Information Management transaction; (viii) adverse effects of litigation and
other commitments and contingencies and (ix) those factors contained in our
periodic reports filed with the SEC, including in the "Risk Factors" section
of our most recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q. The forward-looking information in this document is given as of the date
of the particular statement and we assume no duty to update this information.
Our filings and other important information are also available on the investor
relations page of our web site at www.convergys.com.

Non-GAAP Financial Measures

This news release contains non-GAAP financial measures as defined by the
Securities and Exchange Commission Regulation G; pursuant to the requirements
of this regulation, reconciliations of these non-GAAP measures to their
comparable GAAP measures are included in the attached financial tables. To
assess the underlying operational performance of the continuing operations of
the business for the quarter and to have a basis to compare underlying
operating results to prior and future periods, management uses operating
income, net income from continuing operations and diluted earnings per share
from continuing operations metrics excluding certain items related to unusual,
non-operational or restructuring-related activities.

Limitations associated with the use of these non-GAAP measures include that
these measures do not include all of the amounts associated with our results
as determined in accordance with GAAP. Management compensates for these
limitations by using the non-GAAP measures, operating income, income from
continuing operations, net of tax and diluted earnings per share from
continuing operations excluding the items above, and the GAAP measures,
operating income, income from continuing operations, net of tax and diluted
earnings per share, in its evaluation of performance. There is no material
purpose for which we use these non-GAAP measures beyond those described above.

The Company presents the non-GAAP financial measures EBITDA and Adjusted
EBITDA because management uses these measures to monitor and evaluate the
performance of the business and believes the presentation of these measures
will enhance the investors' ability to analyze trends in the business and
evaluate the Company's underlying performance relative to other companies in
the industry.

Management uses the non-GAAP metric free cash flow to assess the financial
performance of the Company. Convergys' management believes that free cash flow
is useful to investors because it relates the operating cash flow of the
Company to the capital that is spent to continue and improve business
operations, such as investment in the Company's existing businesses. Further,
free cash flow facilitates management's ability to strengthen the Company's
balance sheet, to repurchase the Company's stock, to pay dividends, and to
repay the Company's debt obligations. Management also believes the
presentation of this measure will enhance the investors' ability to analyze
trends in the business and evaluate the Company's underlying performance
relative to other companies in the industry. Limitations associated with the
use of free cash flow include that it does not represent the residual cash
flow available for discretionary expenditures as it does not incorporate
certain cash payments including payments made on capital lease obligations or
cash payments for business acquisitions. Management compensates for these
limitations by using both the non-GAAP measure, free cash flow, and the GAAP
measure, cash flow from operating activities, in its evaluation of
performance. There is no material purpose for which we use these non-GAAP
measures beyond the purposes described above.

These non-GAAP measures should be considered supplemental in nature and should
not be considered in isolation or be construed as being more important than
comparable GAAP measures. The non-GAAP financial information that we provide
may be different from that provided by our competitors or other companies.

Webcast Presentation:

Convergys will hold its Fourth quarter Financial Results webcast presentation
at 10:00 a.m., Eastern time, Wednesday, February 5. It will feature its
President and CEO Andrea Ayers and CFO Andre Valentine. The webcast
presentation will take place live and will then be available for replay at
this link - http://tinyurl.com/4Q13ConferenceCall. This link will replay the
webcast presentation through March 7. You may also access the webcast or the
recording via the Convergys website, www.convergys.com. Click "Company," then
"Investor Relations," then "Events and Webcasts."

Supporting Resources

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About Convergys

As a leader in customer management for over 30 years, Convergys is uniquely
focused on helping companies find new ways to enhance the value of their
customer relationships and deliver consistent customer experiences across all
channels and geographies. Every day, over 82,000 employees help our clients
balance the demands of increasing revenue, improving customer satisfaction,
and reducing overall cost using an optimal mix of agent, technology, and
analytics solutions. Our actionable insight stems from handling billions of
customer interactions annually for our clients. Visit www.convergys.com to
learn more.

(Convergys and the Convergys logo are registered trademarks of Convergys
Corporation)

CONVERGYS CORPORATION
Consolidated Statements of Income
(Unaudited)
                                                                       
                                                                                  
                     For the Three Months             For the Twelve Months
                     Ended Dec 31,           %        Ended Dec 31,               %
(In millions
except per share     2013        2012        Change   2013          2012          Change
amounts)
                                                                                  
Revenues:
  Communications       309.7       302.6     2          1,218.0       1,205.4     1
  Technology           54.2        46.3      17         198.6         172.7       15
  Financial            45.3        48.0      (6)        179.9         203.3       (12)
  Services
  Other               118.1     111.9    6         449.6       423.6      6
     Total           $ 527.3     $ 508.8     4        $ 2,046.1     $ 2,005.0     2
     Revenues
                                                                                  
Costs and
Expenses:
  Cost of
  Providing            348.6       329.6     6          1,335.1       1,289.5     4
  Services and
  Products Sold
  Selling,
  General and          114.8       120.4     (5)        467.7         477.2       (2)
  Administrative
  Research and
  Development          1.9         2.1       (10)       8.2           10.8        (24)
  Costs
  Depreciation         21.2        21.9      (3)        85.5          82.4        4
  Amortization         1.3         1.2       8          5.3           6.3         (16)
  Restructuring        -           2.6       NM         5.4           11.6        (53)
  Charges
  Asset
  Impairment and      -         -        -         1.5         88.6       (98)
  other
     Total Costs
     and              487.8     477.8    2         1,908.7     1,966.4    (3)
     Expenses
                                                                                  
  Operating            39.5        31.0      27         137.4         38.6        NM
  Income
                                                                                  
Other Income,          0.3         1.4       (79)       5.1           4.3         19
net
Interest Expense      (2.8  )    (2.8  )   -         (11.5   )    (13.6   )   (15)
                                                                                  
  Income Before
  Income Taxes
  and                  37.0        29.6      25         131.0         29.3        NM
  Discontinued
  Operations
                                                                                  
Income Tax
Expense               12.5      (0.6  )   NM        26.1        1.1        NM
(Benefit)
                                                                                  
  Income from
  Continuing           24.5        30.2      (19)       104.9         28.2        NM
  Operations,
  net of tax
  Income from
  Discontinued
  Operations,
  net of tax
  (benefit)
  expense of
  ($0.3) and
  ($0.5), for
  the three
  months ended        0.4       1.8      (78)      2.4         72.4       (97)
  December 31,
  2013 and 2012,
  respectively,
  and ($8.8) and
  $51.1 for the
  twelve months
  ended December
  31, 2013 and
  2012,
  respectively
                                                                                  
Net Income           $ 24.9     $ 32.0     (22)     $ 107.3      $ 100.6      7
                                                                                  
Basic Earnings
Per Common Share
  Continuing         $ 0.25      $ 0.28               $ 1.02        $ 0.25
  Operations
  Discontinued       $ 0.00     $ 0.02              $ 0.02       $ 0.65    
  Operations
  Net Basic
  Earnings Per       $ 0.25     $ 0.30              $ 1.04       $ 0.90    
  Common Share
                                                                                  
Diluted Earnings
Per Common Share
  Continuing         $ 0.23      $ 0.27               $ 0.96        $ 0.24
  Operations
  Discontinued       $ 0.00     $ 0.02              $ 0.02       $ 0.62    
  Operations
  Net Diluted
  Earnings Per       $ 0.23     $ 0.29              $ 0.98       $ 0.86    
  Common Share
                                                                                  
Weighted Average
Common Shares
Outstanding
  Basic                100.8       107.0                103.3         112.2
  Diluted              106.8       112.0                109.2         117.1
                                                                                  
Market Price Per
Share
  High               $ 21.40     $ 17.42              $ 21.40       $ 17.42
  Low                $ 18.12     $ 14.68              $ 15.05       $ 12.13
  Close              $ 21.05     $ 16.41              $ 21.05       $ 16.41
                                                                                  

CONVERGYS CORPORATION
Reconciliation of GAAP EPS from Continuing Operations to non-GAAP EPS from
Continuing Operations
(In Millions Except Per Share Amounts)
                                                                
                                                         Three Months
                                                         Ended Dec 31,
                                                         2013        2012
                                                                     
Revenue                                                  $ 527.3     $ 508.8
                                                                     
Operating income as reported under U.S. GAAP             $ 39.5      $ 31.0
                                                                     
         Operating Margin                                  7.5   %     6.1   %
         Net pension and other post employment             1.2         6.8
         benefit plan charges ^(a)
         Acquisition related expenses ^ (b)               2.7       -     
         Total charges                                    3.9       6.8   
                                                                     
Adjusted operating income (a non-GAAP measure)           $ 43.4     $ 37.8  
                                                                     
         Adjusted Operating Margin                         8.2   %     7.4   %
                                                                     
Income Before Income Taxes and Discontinued              $ 37.0      $ 29.6
Operations as reported under U.S. GAAP
                                                                     
         Total operating charges from above               3.9       6.8   
                                                                     
Adjusted Income Before Income Taxes and Discontinued     $ 40.9     $ 36.4  
Operations (a non-GAAP measure)
                                                                     
Income from continuing operations, net of tax, as        $ 24.5      $ 30.2
reported under U.S. GAAP
                                                                     
         Total operating charges from above, net of        3.4         4.2
         tax
         Adjustment of tax to normalized rate ^(c)        -         (6.7  )
                                                                     
Adjusted net income from continuing operations, net      $ 27.9     $ 27.7  
of tax (a non-GAAP measure)
                                                                     
Diluted EPS from continuing operations as reported       $ 0.23      $ 0.27
under U.S. GAAP
                                                                     
         Net impact of total charges included in          0.03      (0.02 )
         continuing operations
                                                                     
Adjusted diluted EPS from continuing operations (a       $ 0.26     $ 0.25  
non-GAAP measure)
                                                                             

(a) During the fourth quarter of 2013 and 2012, the Company recorded net
pension and other post employment benefit plan charges of $1.2 and $6.8,
respectively. The 2013 charge includes a pension settlement charge of $1.5 and
settlement gain of $0.3 related to the Executive Deferred Compensation Plan.
During the three months ended December 31, 2012, the Company recorded a
pension settlement charge of $6.8 due to a high volume of lump sum payouts as
a result of the sale of the Information Management business.

(b) During the fourth quarter of 2013, the Company recorded $2.7 of expense
associated with its pursuit of SGS Holdings, Inc. ("Stream"), related to fees
paid for third-party consulting services.
                                        
(c) In the fourth quarter of 2012, the Company recognized net tax benefits
from international transactions, certain discrete items and state
apportionment. At a normalized tax rate of 24%, the Company would have
recognized tax expense in excess of the expense reported under U.S. GAAP.
                                        
Management uses operating income, income from continuing operations, net of
tax and earnings per share from continuing operations excluding the above
items to assess the underlying operational performance of the continuing
operations of the business for the year and to have a basis to compare
underlying operating results to prior and future periods. These charges and
credits are relevant in evaluating the overall performance of the business.

Limitations associated with the use of these non-GAAP measures include that
these measures do not include all of the amounts associated with our results
as determined in accordance with GAAP. Management compensates for these
limitations by using the non-GAAP measures, operating income, income from
continuing operations, net of tax and diluted earnings per share excluding the
charges, and the GAAP measures, operating income, income from continuing
operations, net of tax and diluted earnings per share, in its evaluation of
performance. There are no material purposes for which we use these non-GAAP
measures beyond those described above.


CONVERGYS CORPORATION
Reconciliation of GAAP EPS from Continuing Operations to non-GAAP EPS from
Continuing Operations
(In Millions Except Per Share Amounts)
                                                              
                                                     For the Twelve Months
                                                     Ended Dec 31,
                                                     2013          2012
                                                                   
Revenue                                              $ 2,046.1     $ 2,005.0
                                                                   
Operating income as reported under U.S. GAAP         $ 137.4       $ 38.6
                                                                   
    Operating Margin                                   6.7     %     1.9     %
    Net pension and other post employment              13.1          4.1
    benefit plan charges ^(a)
    Asset impairment and other ^(b)                    1.5           88.6
    Acquisition related expenses ^ (c)                 2.7           -
    Restructuring ^(d)                                 -             6.4
    Information Management costs not qualifying       -           8.8     
    as Discontinued Operations ^(e)
    Total charges                                     17.3        107.9   
                                                                   
Adjusted operating income (a non-GAAP measure)       $ 154.7      $ 146.5   
                                                                   
    Adjusted Operating Margin                          7.6     %     7.3     %
                                                                   
Income Before Income Taxes and Discontinued          $ 131.0       $ 29.3
Operations as reported under U.S. GAAP
                                                                   
    Total operating charges from above                 17.3          107.9
    Orlando financing fees ^(g)                       -           1.1     
    Total charges                                     17.3        109.0   
                                                                   
Adjusted Income Before Income Taxes and              $ 148.3      $ 138.3   
Discontinued Operations (a non-GAAP measure)
                                                                   
Income from continuing operations, net of tax,       $ 104.9       $ 28.2
as reported under U.S. GAAP
                                                                   
    Total operating charges from above, net of         11.9          84.5
    tax
    Adjustment of tax to normalized rate ^(f)          -             (6.7    )
    Orlando financing fees of $1.1, net of tax        -           0.7     
    ^(g)
                                                                   
Adjusted income from continuing operations, net      $ 116.8      $ 106.7   
of tax (a non-GAAP measure)
                                                                   
Diluted EPS from continuing operations as            $ 0.96        $ 0.24
reported under U.S. GAAP
                                                                   
    Net impact of total charges included in           0.11        0.67    
    continuing operations
                                                                   
Adjusted diluted EPS from continuing operations      $ 1.07       $ 0.91    
(a non-GAAP measure)
                                                                             

(a) During 2013 and 2012, the Company recorded net pension and other post
employment benefit plan charges of $13.1 and $4.1, respectively. The 2013
charge includes a pension plan settlement charge of $13.4 and settlement gain
of $0.3 related to the Executive Deferred Compensation Plan, while the 2012
charge includes $4.1 of curtailment credits from pension and other post
employment benefits plans, $1.4 of post-retirement benefits costs related to
changes in the executive management team and $6.8 pension settlement charge
due to a high volume of lump sum payouts as a result of the sale of the
Information Management business.

(b) During 2012, the Company recorded an impairment charge of $46.0 for the
goodwill of the Customer Interaction Technology reporting unit. In addition,
as the result of a decision to monetize certain real estate assets, these
assets were reclassified to Held for Sale and the Company recorded an
impairment charge of $1.5 and $42.6 for the twelve months ended December 31,
2013 and 2012, respectively, to reduce the carrying value to estimated fair
value less cost to sell.
                                        
(c) During the fourth quarter of 2013, the Company recorded $2.7 of expense
associated with its pursuit of SGS Holdings, Inc. ("Stream"), related to fees
paid for third-party consulting services.
                                        
(d) The results for 2012 include $6.4 of restructuring charges to reflect the
change in our executive team and to reflect the impact of the sale of the
Information Management business.
                                        
(e) In March 2012, the Company signed a definitive agreement to sell the
Information Management business and the sale substantially closed in May 2012.
The results of operations met the criteria for presentation as discontinued
operations and therefore are presented on this basis for all periods
presented. Certain costs previously allocated to the Information Management
segment do not qualify for discontinued operations accounting treatment and
are required to be reported as costs within continuing operations. The Company
classified $8.8 of these costs, which previously would have been presented
within the Information Management segment within continuing operations for the
twelve months ended December 31, 2012.
                                        
(f) In the fourth quarter of 2012, the Company recognized net tax benefits
from international transactions, certain discrete items and state
apportionment. At a normalized tax rate of 24%, the Company would have
recognized tax expense in excess of the expense reported under U.S. GAAP.
                                        
(g) In the second quarter of 2012, the Company exercised its option to
purchase its leased office facility in Orlando, Florida by discharging the
related lease financing obligation in the aggregate principal amount of $55.0.
In connection with the purchase, the Company expensed $1.1 of previously
deferred financing fees as interest expense.
                                        
Management uses operating income, income from continuing operations, net of
tax and earnings per share data excluding the items above to assess the
underlying operational performance of the continuing operations of the
business for the year and to have a basis to compare underlying operating
results to prior and future periods. These charges and credits are relevant in
evaluating the overall performance of the business.

Limitations associated with the use of these non-GAAP measures include that
these measures do not include all of the amounts associated with our results
as determined in accordance with GAAP. Management compensates for these
limitations by using the non-GAAP measures, operating income, income from
continuing operations, net of tax and diluted earnings per share excluding the
charges, and the GAAP measures, operating income, income from continuing
operations, net of tax and diluted earnings per share, in its evaluation of
performance. There are no material purposes for which we use these non-GAAP
measures beyond those described above.


CONVERGYS CORPORATION
Reconciliation of Net Income from Continuing Operations to Adjusted EBITDA
(Unaudited)
                                                                  
                                                                           
                                                                           
                    For the Three                  For the Twelve Months
                    Months
                    Ended Dec 31,         %        Ended Dec 31,           %
(In millions)       2013       2012       Change  2013        2012        Change
                                                                           
Income from
Continuing          $ 24.5     $ 30.2     (19)     $ 104.9     $ 28.2      NM
Operations, net
of tax
    Depreciation
    and               22.5       23.1     (3)        90.8        88.7      2
    Amortization
    Interest          2.8        2.8      -          11.5        13.6      (15)
    expense
    Income tax       12.5     (0.6 )   NM        26.1      1.1      NM
    expense
  EBITDA (a
  non-GAAP          $ 62.3     $ 55.5     12       $ 233.3     $ 131.6     77
  measure)
                                                                           
                                                                           
    Asset
    impairment        -          -        NM         1.5         88.6      (98)
    and other
    Restructuring     -          -        NM         -           6.4       NM
    Acquisition
    related           2.7        -        NM         2.7         -         NM
    expenses
    Information
    Management
    costs not         -          -        NM         -           8.8       NM
    qualifying as
    Discontinued
    Operations
    Net pension
    and other
    post             1.2      6.8     (82)      13.1      4.1      NM
    employment
    benefit plan
    charges
                                                                           
  Adjusted EBITDA
  (a non-GAAP       $ 66.2    $ 62.3    6        $ 250.6    $ 239.5    5
  measure)
                                                                           
  EBITDA Margin       11.8 %     10.9 %              11.4  %     6.6   %
                                                                           
  Adjusted EBITDA     12.6 %     12.2 %              12.2  %     11.9  %
  Margin
                                                                           

The Company presents the non-GAAP financial measures EBITDA and Adjusted
EBITDA because management uses these measures to monitor and evaluate the
performance of the business and believes the presentation of these measures
will enhance the investors' ability to analyze trends in the business and
evaluate the Company's underlying performance relative to other companies in
the industry.

These non-GAAP measures should not be considered in isolation or as a
substitute for income from continuing operations, net of tax or other income
statement data prepared in accordance with GAAP and our presentation of these
measures may not be comparable to similarly-titled measures used by other
companies. Management uses both these non-GAAP measures and the GAAP measure,
income from continuing operations, net of tax, in evaluation of its underlying
performance. There are no material purposes for which we use these non-GAAP
measures beyond the purposes described above. These non-GAAP measures should
be considered supplemental in nature and should not be considered in isolation
or be construed as being more important than comparable GAAP measures.


CONVERGYS CORPORATION
Consolidated Balance Sheets
(Unaudited)
                                                       
                                                           
                                               Dec. 31,    Dec. 31,
(In millions)                                  2013        2012
                                                           
Assets
                                                           
Cash and Cash Equivalents                      $ 580.8     $ 554.7
Short Term Investments                           82.9        83.8
Receivables - Net                                319.8       319.8
Other Current Assets                             82.5        107.7
Current Assets - Held for Sale                   -           34.6
Property and Equipment - Net                     246.4       279.2
Other Assets                                    655.3      658.1
Total Assets                                   $ 1,967.7   $ 2,037.9
                                                           
                                                           
Liabilities and Shareholders' Equity
                                                           
Debt Maturing in One Year                      $ 0.9       $ 0.7
Other Current Liabilities                        254.2       285.8
Other Liabilities                                316.4       319.6
Long-Term Debt                                   60.2        59.9
Common Shareholders' Equity                     1,336.0    1,371.9
Total Liabilities and Shareholders' Equity     $ 1,967.7   $ 2,037.9
                                                             

CONVERGYS CORPORATION
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow
(Unaudited)
                                                       
                                                                           
                                                                           
                        For the Three Months        For the Twelve Months
                        Ended Dec 31,               Ended Dec 31,
(In millions)           2013        2012            2013        2012
                                                                           
Net cash provided by    $ 60.7      $ 10.1          $ 210.0     $ 113.0
operating activities
                                                                           
     Capital            (20.6 )    (36.1 )        (63.8 )    (104.6 ) (a)
     expenditures
                                                                           
Free cash flow (a       $ 40.1     $ (26.0 )       $ 146.2    $ 8.4    
non-GAAP measure)
                                                                           

(a) Includes  $6.2 of capital expenditures related to the Information
Management business for the twelve months ended December 31, 2012.

Management uses free cash flow to assess the financial performance of the
Company. Convergys' Management believes that free cash flow is useful to
investors because it relates the operating cash flow of the Company to the
capital that is spent to continue and improve business operations, such as
investment in the Company’s existing businesses. Further, free cash flow
facilitates Management’s ability to strengthen the Company’s balance sheet, to
repay the Company’s debt obligations and to repurchase the Company’s common
shares. Management also believes the presentation of this measure will enhance
the investors' ability to analyze trends in the business and evaluate the
Company's underlying performance relative to other companies in the industry.

Limitations associated with the use of free cash flow include that they do not
represent the residual cash flow available for discretionary expenditures as
they do not incorporate certain cash payments including payments made on
capital lease obligations or cash payments for business acquisitions.
Management compensates for these limitations by using both the non-GAAP
measure, free cash flow, and the GAAP measure, cash from operating activities,
in its evaluation of performance. There are no material purposes for which we
use this non-GAAP measure beyond the purposes described above. This non-GAAP
measure should be considered supplemental in nature and should not be
considered in isolation or be construed as being more important than
comparable GAAP measures.


Convergys Corporation
Summarized Statement of Cash Flow
(Unaudited)
                                                            
                                                                              
               For the Three Months               For the Twelve Months
               Ended Dec 31,                      Ended Dec 31,
(In            2013            2012               2013             2012
millions)
                                                                              
Net cash
provided
by             $ 60.7          $ 10.1             $ 210.0          $ 113.0
operating
activities
                                                                              
Net cash
provided
by (used         24.8    (a)    (95.7  ) (a)      (35.6  ) (b)    262.6    (b)
in)
investing
activities
                                                                              
Net cash
used in         (30.6 )        (57.0  )          (148.3 )        (242.7 )
financing
activities
                                                                              
Net
increase       $ 54.9         $ (142.6 )         $ 26.1          $ 132.9  
(decrease)
in cash
                                                                              

(a) Includes  $20.6 and $36.1 of capital expenditures for the three months
ended December 31, 2013 and 2012, respectively.

(b) Includes  $63.8 and $104.6 of capital expenditures for the twelve months
ended December 31, 2013 and 2012, respectively.

Contact:

Convergys Corporation
David Stein, Investor Relations, +1-513-723-7768
investor@convergys.com
or
Krista Boyle, Public/Media Relations, +1-513-723-2061
krista.boyle@convergys.com
 
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